A product with a free service or a service with a free product
In retail there is a battle for survival. Bricks and mortar
stores are having huge problems to deal with the competition from E-commerce.
Most players are rather creative in trying to capture the
attention of potential customers.
Last week I did buy a Sonos loudspeaker. These are rather
pricey, so I had just put it on my wish list. By coincidence I saw that Sonos
now had a special offer. This offer includes a full year free service from a streaming
music service called Deezer. The regular price of this service is €9,99 per
month and I now have free access for a year. That seems like a great deal for
me.
But who will benefit from this deal , is it Sonos or
Deezer.? Probably Sonos has to pay a certain amount to Deezer to include this
offer. After one year, I can cancel my subscription to Deezer and do a market
scan for the right offer, This can be Deezer, but also one of their competitors
like Spotify. Then Deezer runs the risk that they will loose me as a customer.
For Sonos, it doesn’t matter, as they did sell their product already.
I think a better alternative would have been the other way
around. What do I mean? Why didn’t Deezer offer me their music service for
maybe €15,- per month in which the use of an up to date Sonos speaker is
included? In that way all three parties (customer, Sonos and Deezer) involved
will benefit and there is a high likelihood that I would be a loyal customer
for a few years.
It looks like an old approach, where services are offered
for free. Service providers should be more aware of their position in the
market and take the lead, rather than putting themselves in a dependent
position form product manufacturers.
Enthusiasm drives Excellence!